Asset Depletion: Qualify Using Your Portfolio

Asset depletion (also called asset utilization or asset-based qualifying) lets a borrower convert their liquid net worth into qualifying income. If you have meaningful assets but no traditional employment, this is how you finance a home purchase or refinance without compromising your portfolio.

The lender takes your eligible liquid assets, divides by a fixed number of months (typically 60 or 84), and treats the result as monthly income. No actual drawdown is required — your portfolio stays intact.

How qualifying income is calculated

Most programs use one of two formulas:

• Conservative (60-month): eligible assets ÷ 60 = monthly qualifying income. Used when assets are the sole source.
• Aggressive (84-month): eligible assets ÷ 84 = monthly qualifying income. Common when paired with other income.

What counts as an eligible asset

• 100% of checking, savings, money market, and CDs.
• 70–80% of non-retirement brokerage accounts (stocks, bonds, mutual funds).
• 60–70% of retirement accounts (401k, IRA) — discounted for taxes/penalties; borrower typically must be eligible for distributions.
• Excluded: business accounts, real estate equity, restricted/locked-up positions.

What you need to qualify

• Credit: 680+ minimum, 720+ for best pricing.
• LTV: Up to 80% on purchase, 70–75% on cash-out.
• Asset seasoning: Funds typically must be in your name for 60+ days (sourced and seasoned).
• Reserves: Built into the calculation — your post-close balance must still cover the qualifying months.

Where asset depletion wins

• You're retired with significant savings but no W-2 income.
• You sold a business and are between ventures.
• You have a large brokerage portfolio that you don't want to liquidate just to qualify.
• Your income is dividend- and capital-gain-heavy with low ordinary income.